VAT Tribunal Decision

Insurance intermediary

Tax practitioners are probably tired of hearing the phrase 'provision of services through an intermediary' as this implies yet another reference to IR35 but this case both concerns VAT and the insurance industry.

Customs and Excise had issued an assessment under section 73 VAT Act 1994 on the appellant company for a sum of £63 607 (plus interest) for a period of two and a half years ending on 31 July 1999. Additionally a misdeclaration penalty had been imposed in the sum of £8 448.

The appellant company provided a legal helpline to the well-known insurance company Direct Line in respect of the legal expenses policy indemnity included by Direct Line as an addition to its home and motor policies.

Customs and Excise had contended that the services provided by the appellant company were those of legal services. It was...